Malaysia legislation
Section 104
of LABUAN ISLAMIC FINANCIAL SERVICES AND SECURITIES ACT 2010
Section 104
(2)
The Authority may present a petition for the winding-up of a Labuan takaful operator or its Labuan takaful business on the grounds of its inability to meet any liabilities or when it suspends payment to its creditors.
(3)
For the purposes of subsections (1) and (2), the court shall have regard to the interests of the policy owners, other customers and creditors of the Labuan takaful operator.
(4)
In any winding-up of a Labuan takaful operator, or when a Labuan takaful operator becomes insolvent, there shall be paid from the assets in the takaful fund or other funds of the Labuan takaful operator in priority to all other unsecured liabilities, the following liabilities in the following sequence:
(a)
the costs and expenses of the winding-up, including the costs of the liquidator or the receiver;
(b)
all wages or salary, whether or not earned wholly or in part by way of commission, including any amount payable by way of allowance or reimbursement under any contract of employment or award or agreement regulating conditions of employment, of any employee not exceeding one thousand five hundred ringgit or its equivalent in foreign currency or such other amount or denomination as may be specified from time to time in respect of services rendered by him to the Labuan takaful operator within a period of four months before the commencement of the winding-up;
(c)
all amounts due in respect of workers’ compensation, under any written law relating to workers’ compensation, which accrued before the commencement of the winding-up;
Labuan Islamic Financial Services and Securities 117
(d)
all remuneration payable to any employee in respect of vacation leave, or in the case of his death to any other person in his right, which accrued in respect of any period before the commencement of the winding-up;
(e)
all amounts due in respect of contributions payable during the twelve months next before the commencement of the winding-up by the Labuan takaful operator as the employer of any person under any written law relating to employees’ superannuation or provident funds or under any scheme of superannuation or retirement benefit which is an approved scheme under any federal law relating to income tax;
(f)
the amount of all federal tax assessed under any written law before the date of the commencement of the winding-up or assessed at any time before the time fixed for the proving of liability has expired;
(g)
all the liabilities and expenses attributable to its Labuan takaful business of the class for which the particular takaful fund is created; and
(h)
the amounts required to make good any deficit in the other takaful funds after the liabilities and expenses attributable to the Labuan takaful business of the class to which the particular takaful fund referred to in paragraph (g) is applicable have been fully met.
(5)
The liabilities in each class specified in subsection (4) shall rank in the order specified but liabilities of the same class shall rank equally between themselves, and shall be paid in full, unless the assets in the takaful fund of the Labuan takaful operator are insufficient to meet them, in which case they shall abate in equal proportions between themselves.
(6)
For the avoidance of doubt, the provisions relating to the winding-up as applied to a Labuan takaful operator shall not apply to any takaful fund which are segregated pursuant to section 85
and which shall not form part of the assets of the Labuan takaful operator.
Act 705
(7)
The provisions of this section shall have effect notwithstanding anything inconsistent therewith or contrary thereto in any other written law.